In an act seen as an escalation the row between the politicians and the technocrats at Kampala Capital City Authority (KCCA) councillors have voted to reduce property rates in the city.
KCCA attaches a value on the properties depending on revenue that the owner generates from it annually. The money is computed at a rate of six percent of the ratable value which is calculated at 76 percent. The additional 24 percent is left for the owner to cater for utility bills and property maintenance.
But councillors argued that the rate was too high and based on a proposal introduced by Nakawa I Councillor Okwera Mugisha, they took a decision to reduce the property rate to four percent. The proposal was adopted in a council meeting chaired by Deputy Lord Mayor, Sarah Kanyike today.
However, the decision was opposed by KCCA technocrats, who walked out of the authority meeting in protest.
The acting Deputy Executive Director of Kampala Sam Sserunkuma cautioned councillors against the move saying that this was not their mandate. He said that the powers to review property rates were delegated to the valuation court, chaired by city lawyer Asuman Basalirwa.
Sserunkuma added that the move is likely to distort KCCA budgets and that councillors will have to convene and draft a new budget, identify new sources of revenue and find about 8 billion Shilling to compensate central division landlords who have already paid property rate calculated at six percent.
According to the Local Government (Rating) Act 2005 that provides for property rates, when a draft valuation roll for an area is released, landlords contesting value attached to their properties are supposed to register their complaints to the valuation court within 30 days. It’s the court that can decide to reduce or increase the rate attached to the property.
Sserunkuma told the council that landlords have not been complaining about the rates charged by KCCA. If they had complaints, he argued that would have petitioned the valuation court. For instance in Nakawa Division, Sserunkuma said only about 300 out of 19,000 landlords challenged property rates attached to their properties.
The Local Government (Rating) Act stipulates that property rate has to be between 0 to 12 percent. KCCA has been charged 6 percent since 2005. Sserunkuma told councillors that they had an opportunity to adjust the rate last year when they approved the valuation court appointed by lord mayor Erias Lukwago.
Sserunkuma further told councillors that out of Central Division new property rates introduced last year, landlords have paid 13 billion Shillings out of 19 billion Shillings that KCCA projects to collect. He warned councillors that if they want to develop Kampala, they should stop politicking in tax matters.
Similarly, Nakawa II councillor Kennedy Okello who opposed the reduction of the rate says it’s illogical to reduce a rate that has been in place since 2005. He says the rate is already being charged in the central division.